The 'Gross Profit' is transferred to: MCQ with Answer and Explanation

The 'Gross Profit' is transferred to:

A. Profit and Loss Account credit

B. Capital Account

C. Trading Account debit

D. Balance Sheet liability

Answer: Option A

Gross profit is credited to Profit & Loss Account.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1 Report Error

The 'Advance Pricing Agreement' (APA) programme in India is for:

A. Determining arm's length price in international transactions prospectively

B. Customs valuation

C. Fixing GST rates

D. Audit fees

Correct Answer: Option A

Explanation:
APA provides certainty on transfer pricing for future years.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2 Report Error

If the purchase of a printer for ₹12,000 is recorded in the purchases book, the error is:

A. Compensating error

B. Error of omission

C. Error of commission

D. Error of principle

Correct Answer: Option D

Explanation:
Printer is an asset, should be capitalised. Recording in purchases book treats it as expense, violating accounting principles.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3 Report Error

Which of the following books is known as the 'Principal Book' of accounts?

A. Ledger

B. Cash Book

C. Journal

D. Trial Balance

Correct Answer: Option A

Explanation:
The ledger is the principal or chief book of accounts because all financial data is ultimately classified and summarized there.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping